Post-Independence History

PART 3

By –Dr. Mahipal Singh Rathore

©DrMahipalRathore

India After Independence

Integration of Princely States

Tribal Integration in India

Issue of Official Language of India

Linguistic Reorganization of States

Rise of Democracy in India

Economic Development of India

Emergence of Planning System Green Revolution in India

Rise of Democracy in India

• Faced with serious challenges, many leaders from different countries resisted democracy as a form of governance.

• According to the leaders of different countries who gained freedom from colonialism, their priority was national unity, which will not be sustained with democracy as it would bring differences and conflicts.

• But despite illiterate population, diversities and poor economic condition Indian leaders pursued adoption of democratic measures to consolidate India.

• Adoption of constitution on January 26, 1950 – Led to first democratically elected government

• Election commission of India was set up in Jan 1950 with constitutional provision to conduct free & fair elections

• India adopted universal adult franchise irrespective of any distinction of any kind with prescribed condition of age.

• Election commission soon realized that it was an uphill task to conduct a free and fair election in a country of India’s size.

• No election on this scale had ever been conducted in the world before.

• Holding an election required delimitation or drawing the boundaries of electoral rolls

• Woman often registered themselves as wife or daughter of somebody rather registering themselves by their names

• Given the unawareness & high level of illiteracy, election commission trained over 3 lakh officers and polling staff to conduct the election.

• Candidates were to be identified by symbols, assigned to each major party

• Ballot was kept secret

• A remarkable feature was the wide participation of women: at least 40% of women eligible to vote did so.

• When elections results were declared, it was realized that nearly 46% of eligible voters had cast their vote.

• Thus, faith of the leadership in the people was fully justified

• Shyam Saran Negi, born on 1 July 1917 in Kalpa, Himachal Pradesh, is a retired schoolteacher who cast the first vote on 25 October 1951. in the 1951/52 general election in India — the nation's first election

• Although the majority of the election took place in February 1952, residents of Himachal Pradesh were given the chance to vote five months early because of the probability that heavy snowfall would make it impossible for citizens to reach the polling stations

The Congress System • Congress had emerged as the single largest party & formed government in all the

states & at centre in 1952.

• The fair and peaceful conduct of polls was an indication that the democratic system & institutions, a legacy of the national movement were beginning to take root.

• The successful conduct of the polls was one of the reasons why India and Nehru, came to be admired abroad, especially in the ex-colonial countries.

• In the first decade, congress acted both as the ruling party as well as the opposition.

• Congress adopted inclusive approach & accepted membership of all the strata of society & was an ideological coalition.

• It accommodated the revolutionary and pacifist, conservative & radical, extremist & moderate & right, left and all shades of the centre.

• The coalitional nature of congress party tolerated & encouraged various factions and instead of being a weakness, internal factionalism became the strength of the congress.

• The system of factions functioned as balancing mechanism within the ruling party.

Emergence of Opposition Parties • In initial years, all opposition parties achieved only a token representation in

Lok Sabha & State assemblies during the “congress system” period.

• Yet these oppositions played a key role in maintaining the democratic character of the system.

• The opposition parties offered a sustained and principle criticism of the ruling parties and policies of the congress.

• In the beginning, there was high respect between congress & opposition leaders

• But the positive rapport between congress & opposition leaders gradually declined when these parties in intense competition of achieving power.

• As the ability of congress to accommodate all interests and all aspirants for political hour steadily declined, other political parties started gaining greater significance.

Socialist party • Foundation laid in 1934 as Congress Socialist Party, when some leaders within

congress party have sought more radical & egalitarian congress.

• After independence, the congress party changed the rule regarding dual membership & barred CSP members with congress’s membership.

• This situation compelled CSP leaders to form separate Socialist Party in 1948.

• Socialists believed in the ideology of democratic socialism which distinguished them both from congress and communists.

• Socialist party leaders criticized congress for favouring capitalists and landlord and ignoring masses like workers, peasants.

• In the contemporary times, the Samajwadi party, Rashtriya Janta Dal (RJD), Janta Dal (United), Janta Dal (Secular) trace their origins to the socialist party.

Bharatiya Jan Sangh (BJS)

• Formed in 1951 by Shyama Prasad Mukherji, it traced its roots to RSS & Hindu Mahasabha before independence.

• BJS emphasised the idea of one country, one culture and one notion and believed that the country could become modern, progressive and strong on the basis of Indian culture and traditions.

• BJS leaders were Shyama Prasad Mukharji, Deen Dayal Upadhayaya, and Balraj Madhok.

• In the contemporary times, the Bharatiya Janta Party (BJP) traces its roots to BJS

The Communist Party of India • Taking inspiration from the Bolshevik revolution in Russia, there emerged lots

of communist group advocating socialism is the solution to the problems affecting the nation in 1920’s.

• The communists worked mainly within the congress fold, but they had separated themselves from the congress when they supported British in WW2.

• Communist believed in violent uprising to gain control but after independence they abandoned violent means & participated in general elections - emerged as second largest opposition party.

• CPI spilt up in 1964 and the pro-china faction formed the CPI (Marxist).

• Now, the base of both has shrunk a lot and their presence is concentrated in very few states of the country – WB,Kerala,Tripura

Swatantra Party

• The Swatantra party was formed in August 1959 after Nagpur resolution of the congress which called for land ceilings, takeover of food grain trade by the state, adoption of cooperative forming. Those who didn’t believe this resolution formed the separate party

• Party believed lesser involvement of the government in economy & opposed development strategy of state intervention in economy, nationalization & Public sector.

• They opposed progressive tax regime & demanded dismantling of license Raj.

• It was critical of non-alignment policy & friendly relations of India with the Soviet Union and advocated closer ties with the USA.

• The industrialist and big landlords supported this party.

• This party has a very limited influence, lacked dedicated cadres, so it didn’t perform well.

Economic Development of India

Mixed Economy Model • Post-Independence condition: Poverty, illiteracy, ruined agriculture & industry .

Thus the Economy was in a bad shape .

• Ensuring well-being and economic development were the important challenges for the Indian leadership.

• To pursue these goals, they had two model of economic development

1 . Liberal – capitalist model followed in USA & Europe

2. Socialist - model followed in USSR and communist nations .

India adopted the mixed model of economic development, which has features of both the capitalist & socialist models

• Indian Parliament in 1954 accepted ‘the socialist pattern of society as the objective of social & economic policy.

• In fact the model projected was of a “mixed economy” where the public and the private sectors were not only to co-exist but to be complementary to each other.

• Private sector was encouraged to grow with as much freedom as possible within the broad objectives of the national plan.

• There was a mature indigenous entrepreneurial class (Birlas, Tatas, Singhanias) that developed an independent economic base which was an asset for post-independence planned development.

Everyone was more or less agreed on following agenda

• Multi-pronged strategy of economic development based on self-reliance.

• Rapid industrialization based on import-substitution including capital goods industries.

• Prevention of imperialist or foreign capital domination.

• Land reforms involving tenancy reforms.

• Abolition of Zamindari system.

• Introduction of cooperatives especially of service cooperatives like marketing, credit, etc.

Why India rejected capitalist style of Modernization?

• During that era, development meant becoming more and more modern like industrialized countries of West.

• India rejected such model because majority of the people were illiterate & to become modern, breakdown of traditional social structures was required, which was highly impossible.

• Modernization was also associated with the ideas of growth, material progress and scientific rationality, but due to lack of resources and education, it was not possible in India which was fully dyed in the wool of caste based mentality.

• To sum up → Lack of education, poverty, food insecurity, lack of capital, resources & technology, caste based society were major reasons behind rejection of capitalist model of economy.

New Economic Policy 1991 • In the late 1980’s government expenditure began to exceed its revenue by such large

margins that it became unsustainable.

• Inflation was soaring, imports grew in excess to the export to such a level that foreign exchange reserves declined to a level that it was not adequate to finance imports for more than two weeks.

• Foreign exchange was insufficient to pay the interest to international lenders.

• To ward off this precarious situation of economy, India approached the World Bank and IMF and received $7 billion as loan to manage the crisis.

• In return, these institutions wanted that

Govt. should open up the economy by removing restrictions on several sectors

reduce the role of government in many areas

remove trade restrictions.

• India had no choice but to accept these conditions and announced the New Economic Policy.

LPG Reforms • The Crux of the policy was to remove the barrier to the entry of private firms and

to create more competitive environment for the economy.

• These reforms can be classified into two types:

The stabilization measures [short term]

The structural reform measures [Long term]

• Government initiated a variety of policies which fall under three heads viz. Liberalization, Privatization & Globalization, “LPG Policy”.

• The first two are policy strategies & the last one is the outcome of these strategies.

Liberalization • Industrial licensing was abolished for almost all product categories.

• The only industries now reserved for the public sector were - defence equipment, atomic energy generation and railway transport.

• In many industries, the market has been allowed to determine the prices.

• Financial sector reforms – Major aim was to reduce the role of RBI from regulator to facilitator of financial sector. These reforms led to the establishment of private sector banks & entry of foreign banks with certain conditions on FII.

• Tax Reforms – Since 1991, there has been a continuous reduction in the taxes on individual incomes. The rate of corporation tax was reduced; simplification of procedures to pay the income tax was also initiated.

• Foreign Exchange Reforms – Initially the rupee was devalued against foreign currencies. This led to the increase in the inflow of foreign exchange. Now usually, markets determine exchange rates based on the demand and supply of foreign exchange.

Privatization

• Government had shed off the ownership and management of various government owned enterprises.

• Government started disinvestment by selling off equity in PSUs.

• The purpose behind such move was to improve financial discipline and to facilitate modernization.

• The government also made attempts to improve the efficiency of PSUs by giving them autonomy in taking managerial decisions.

Globalization

• Globalisation is the outcome of liberalisation & privatisation.

• Globalisation implies greater interdependence & integration.

• The best example is of outsourcing. e.g. BPOs.

• Globalization is mix bag of results. On one hand it has provided greater access to global markets and imports of high-end technology .

• On the other hand developed countries expand their markets in other (developing) countries.

• It has also been pointed out that market driven globalization has widened the economic disparities among nations and people.

Emergence of Planning System in India

Planning as a process of rebuilding economy earned worldwide public support in 1940’s & 1950’s

• There was a general consensus on one point that ‘the government’ should plan for the development, not the private sector.

• Great depression in Europe, Post WW2 reconstruction of the world, spectacular economic growth against heavy odds in the Soviet Union in the 1930s and 1940s contributed to this consensus.

• 1938 ‘National Planning Committee’ was established under the chairmanship of Nehru by INC. Its recommendations could not be implemented because of the beginning of the Second World War

• 1944 ‘Bombay Plan’ was presented by 8 leading industrialists of Bombay

• 1944 ‘Gandhian Plan’ was given by Narayan Agarwal

• 1945 ‘People’s Plan’ was given by M N Roy

• 1950 ‘Sarvodaya Plan’ was given by J P Narayan – based on Vinoda Bhave’s philosophy

• Planning Commission (as an advisory body to the government) was set up in 1950 by a simple resolution of Government.

The scope of the resolution by which Planning Commission was formed:

Adequate means of livelihood for everyone

Material resources of community should serve the common good

Economic system should operate in such a way that use of ‘means of production’ and ‘wealth’ should not result in well-being of particular community and to the detriment of the society.

• Like USSR, Planning Commission of India opted for five year plan which permitted the government to focus on the larger picture and make long term intervention in the economy.

Target areas of Planning –

• Rural development

• Agriculture

• Industrial Development

• Employment generation

• Poverty reduction

• High growth rate

An outline of the various Five Year Plans

First Five Year Plan: 1951 – 56

• Was based on Harrod – Domar Model of development

• Rapid development of agriculture in order to move towards food self-sufficiency.

• Addressed mainly the agrarian sector including investment in dams and irrigation

• Due to the bitter Partition, Agricultural sector was hit hardest and needed urgent attention

• Also focused on land reform for the country’s development

Second Five Year Plan: 1956 – 61 (Mahalanobis plan)

• Thrust on heavy industries – industrialization

• Advocated huge imports which led to emptying of funds leading to foreign loans

• Deficit financing started in this plan → government funding of spending by borrowing

• Price level increased by 30%, against a decline of 13% during the First Plan

• Focus – Basic & heavy industries such as iron & steel, heavy chemicals like nitrogenous fertilizers, heavy engineering and machine building industry.

Third Five Year Plan: 1961 – 66 – Defence & Price stabilization

• Aim was to make India a ‘Self – Reliant’ and ‘Self – Generating’ Economy

• Panchayat elections started

• Based on the experience of first two plans, agriculture was given top priority to support the exports and industry.

• Complete failure in reaching the targets due to unforeseen events – Chinese aggression (1962), Indo-Pak war (1965), severe drought 1965-66

Three Annual Plans (1966 – 69) – Plan holiday for 3 years

• Prevailing crisis in agriculture and serious food shortage

• Green revolution & introduction of HYVs of crops

• Nationalization of 14 banks in 1969

Fourth Five Year Plan: 1969 -74 – Growth, Stability & self-reliance • Growth with stability & social justice → progress towards self – reliance

• Main emphasis on agriculture’s growth rate so that a chain reaction can start

• Had to tackle the influx of Bangladeshi refugees before and after 1971 Indo – Pak war

• Gadgil formula applied for center’s assistance to states

• Pokhran nuclear test

Fifth Five Year Plan: 1974 – 79 (Garibi Hatao) – Poverty elimination & self-reliance

• Drafted by DD Dhar with an aim to Removal of Poverty’ (Garibi Hatao) and ‘Attainment of Self Reliance’, through promotion of high rate of growth.

• National Program of Minimum needs was initiated - Primary Education, Drinking Water, Medical facilities in rural areas, Food, Land for Landless Labourers, Rural Roads, Rural Electrification etc.

• The plan was terminated in 1978 (instead of 1979) when Janta Government, came to power.

Sixth Five Year Plan (1980 – 85)

• Focus was on increase in national income, modernization of technology

• Ensuring continuous decrease in poverty and unemployment

• Population control through family planning

• National highway plan launched

Seventh Five Year Plan (1985 – 90)

• Aimed at rapid growth in food-grains production & increased employment opportunities

• Targeted productivity within the framework of basic tenets of planning

• It was a great success - the economy recorded 6% growth rate against the targeted 5%.

Eighth Five Year Plan (1992 – 97)

• Focus areas → Human development + Industrial modernisation + Population control.

• The eighth plan was postponed by two years because of political upheavals at the Centre.

• It was launched after a worsening Balance of Payment position and inflation during 1990 − 91.

• Objectives – Liberalization, Privatization & Globalization, together, defined the framework of new policy regime of radical reforms with market driven paradigm of development – emphasized high growth and employment generation.

Ninth Five Year Plan (1997 – 2002)

• Focused on generating employment

• Providing food security to everyone

• Continued liberalization

Tenth Five Year Plan (2002 – 2007)

• Focus areas → Education + Health + Environment

• Reduction of poverty and creation of additional gainful employment

• Agricultural development universal primary education

• Reduction in infant and maternal mortality rates accorded high priority

Eleventh Five Year Plan (2007 – 2012)

• Focus areas → Education + Health + Environment + Infrastructure

• Emphasized the need for focusing on ‘inclusive growth’ -

rapid growth that reduces poverty and creates employment opportunities

Provide access to essential services in health and education especially for the poor

Empowerment through education and skill development.

Twelfth Five Year Plan (2012 – 17)

• Objective - Faster, More inclusive & sustainable growth

• Target Growth rates – GDP (9%) , Agriculture (4%) , Mfg (10%)

• 10% reduction in poverty

• 50 million new jobs

• Reduce IMR to 25

• Increase Child Sex Ratio to 950 +

• Reduce Total Fertility Rate to 2.1

THANK YOU

©DrMahipalRathore